Facebook, Cambridge Analytica Scandal: The Prosumer is also Culpable

Responsibility for Cambridge Analytica’s (mis-)use of Facebook data to aid Donald Trump’s 2016 presidential campaign has, rightly, been accorded to all the major players.
Facebook has been criticized for being lax about its data; encouraging loosely controlled third-party apps; allowing them to gather data, sometimes quite personal in nature, about Facebook users; and lacking the ability to prevent that data from falling into the hands of others, especially those who might misuse it. This permissiveness was good for business as more apps generated more users and therefore more advertising revenue for Facebook.
Cambridge Analytica certainly deserves blame for using private data from responses to a personality quiz (thisisyourdigitalife); an app that was installed on 270,000 computers. That, in turn, led to access to information on about 50 million of the app users’ friends.
And. of course, the Trump campaign was willing, even eager, to use all that data, no matter how it was obtained, to aid Trump’s presidential bid.
While all of the above are culpable, at least some of the responsibility lies with Facebook’s users- the prosumers- who provided the data. They were very cavalier about the information they provided and how it might be used and misused. Most of them did not seem to know there was much they could have done to protect their data. They also did not know about the admittedly minimal defenses (e.g. installing tracker blockers) available to them after they had provided the data.
In the past, I, and others, have criticized social media’s prosumers for allowing their information to be used free of charge (see my November 19, 2017 blog “It’s Time to Pay Digital Prosumers for the Data They Now Provide Free of Charge”). These prosumers now stand accused of being oblivious to the potential uses of their information. Prosumers are, by definition, not only consumers of digital information, but they are also the source- the producers- of that information. As such, they should not only be paid for it, but they should be able to exert control over it. They are guilty of not using (or even being aware of) the power they have as a result being (active) producers of information on Facebook (and elsewhere).
In pointing the finger at prosumers, I am in danger of being guilty of “blaming the victims” in this case. There is something to that accusation, although much more of the blame goes to Facebook, Cambridge Analytica, and the Trump campaign. However, it is not enough for Facebook’s prosumers to accept the fact that they bear some responsibility for the misuse of their data. They need to become what they have the potential to be. That is, “dangerous giants” able not only to exert control over larger systems (e.g. Facebook), but to bring them down when the need arises.
We can expect (minor) reforms as a result of the current scandal, but many risks will always remain. As a result, prosumers need to be aware of what they contribute, as well as the dangers they pose, to systems such as Facebook. When the need arises, they have a responsibility to act like the “giants” they have the potential to be.

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Bitcoin, Blockchain in the Age of Prosumer Capitalism

Producer capitalism, which continues to this day, was dominant from the Industrial Revolution to the end of WW II. It was (and is) based mainly on the exploitation of producers (especially the proletariat). Consumer capitalism grew increasingly predominant, mostly in developed countries, after WW II and remains of central importance to this day, at least in the U.S. (about 70% of the U.S. economy today is accounted for by consumption) and other developed countries. Consumer capitalism relies primarily on the exploitation of consumers through excessive costs for goods and services and by encouraging hyperconsumption. While both producer and consumer capitalism continue to exist, we are now in the era of the emergence of prosumer capitalism. This economic system is rooted in the synergistic exploitation of the prosumer as both producer (prosumer-as-producer) and consumer (prosumer-as-consumer).

In prosumer capitalism people are exploited as prosumers-as-consumers in that, as in the case of consumer capitalism, they pay more than they “should” for their goods and services. The level of exploitation is amplified because they receive little or no economic compensation for the increasing amount of the work they perform in consuming products and services. That is, they are exploited as “working consumers” (prosumers-as-producers), as producers of their own services (e.g., in “working” online, in fast food restaurants, etc.). In some cases (e.g., 3-D printing; additive manufacturing) they are even producing the goods that they will ultimately consume. The exploitation of both prosumers-as-consumers and –as producers is synergistic. In that way, the two types of exploitation build off one another to create unprecedented levels of exploitation…and profitability.

As a highly fluid currency, Bitcoin (or any of the other digital currencies already in existence, or that could be created in the future), as well as blockchain, have the potential to power all forms of global capitalism. This is especially the case in prosumer capitalism since both Bitcoin and blockchain are systems of prosumption that fit seamlessly into prosumer capitalism.

 

Bitcoin, Blockchain and Prosumption

Bitcoin (and other cryptocurrencies) and its underlying blockchain system are prosumption systems. There are no producers or consumers associated with Bitcoin and blockchain. All of those involved both produce and consume; they are prosumers. One journalist makes this absolutely clear in the case of Bitcoin when he points out that those who use the system are “both customers and owners of both the banks and the mint” (italics added). While the “customers” in this context are, in the terms of this approach, prosumers-as-consumers, those associated with the banks and especially the mint (the “producers”) are prosumers-as-producers. Bitcoin (and blockchain) involve both the production (especially by “miners” in Bitcoin) and consumption of data by all “nodes” in the system.

While all involved in Bitcoin (and blockchain) are prosumers, some are at times more producers (prosumers-as-producers), although they must also of necessity consume information. Such prosumers (actually their nodes) function as miners whose computers and their software compete to order new and unordered transactions into a block. They must also create a hash for the block. This involves solving difficult computational problems. Miners (and others) also serve as prosumers-as-producers when they verify transactions (e.g., creation of a new block) undertaken by others. They thereby help to maintain and secure Bitcoin’s network.

While all of this is challenging for the miner, it is easy for others (really their computers) involved in the blockchain to check (to serve as prosumers-as-producers) to make sure that the requirements are met.

As in many other instances today, it is not prosumption that is new. What is new are the technologies (e.g. Bitcoin and blockchain) that make possible new forms of prosumption.

While Bitcoin may yet fail for myriad reasons (a bursting of the current economic bubble, theft of large numbers of bitcoins, loss of faith in digital currencies, etc.), it fits well with various developments in the social world. One is the increase in prosumption and the technologies that expedite, even require, it. Others include the increasing importance of consumption and the spread of consumer culture, globalization, and rationalization (McDonaldization). Blockchain has a similar fit with contemporary social changes, but it is more likely to succeed even if Bitcoin fails. Blockchains, both public and private, have many other uses.  For example, they can be used to track almost everything including voting; use of, and payment, for music and art; and locations of cargo containers

 

An Ignored Factor in Job Loss and Job Change: The “Working Consumer”

The McKinsey Global Institute’s November, 2017 report deals with the future of work (including job loss and change) through 2030, especially in light of automation (and AI). While the report covers a wide array of causes of job change and loss, it, as is usually the case in economic reports, has nothing to say about the role of unpaid non-marketized “working consumers” (a kind of prosumer) in these changes. This omission is especially striking because the report does discuss the implications of the shift from unpaid non-marketized occupations (those that do such domestic work as “childcare, early childhood education, cleaning, cooking and gardening”) to others that are presumably paid and marketized (e.g., workers in the previously non-marketized occupations who are employed by agencies that sell their services in a broader marketplace). The non-marketized unpaid work performed by prosumers is far more important economically than that of the occupations discussed by the report. Further, unlike domestic workers prosumers are not likely to be marketized any time soon.

Among the many examples of the working consumer are prosumers bypassing the services of tellers and doing their own banking via the internet or on ATMs, doing all of the work involved in making purchases (of all manner of goods and services; for example, buying airline tickets online and bypassing travel agents), serving as their own wait- and bus-persons in fast food restaurants, pumping their own gasoline at self-service stations, and so on. While it is the case that this shift to the working consumer leads to the creation of new paid jobs (computer-related occupations relating to the burgeoning online sites), it is likely, at least in the short run, that job loss far exceeds those gains.

The source of the problem lies in the fact that the McKinsey researchers, as well as other economists and technicians associated with these kinds of reports, lack the concept of the prosumer. As a result they are unable to see, let alone analyze and quantify, the prosumer’s role in job change, primarily job loss. While the concept of the prosumer is gaining increasing attention in sociology (and other fields), it has yet to be noticed by economists. Yet, prosumers are doing infinitely more unpaid, non-marketized work than, for example, domestic workers.

It is also worth noting that advances in automation and IT will bring with them an increase in “prosuming machines” that produce and consume largely on their own. Such machines are likely to lead to significant job loss in the future.  For example, autonomous vehicles will be a cause of job loss for Uber, taxi, truck drivers, as well as those in associated occupations. However, far greater job loss will result from the interaction of working consumers and prosuming machines (e.g. the use of ATMs rather than human bank tellers).

Prosuming Machines: Some Recent Advancements

In 2015 I published an article on “prosuming machines”, or those that are able to produce and consume more-or-less simultaneously and increasingly without the intervention of human prosumers. While the human prosumer has recently been rediscovered in the academic literature and much attention has now been devoted to the topic, the irony is that the human prosumer is in the early stages of being supplanted by prosuming machines. A few recent developments in this area are worth mentioning.

The most advanced prosuming machines, at least the ones that seem closest to wide-scale acceptance and use, are self-driving automobiles (including taxis), as well as trucks. Automobiles are difficult to automate since they must be able to navigate crowded and complex city streets. However, since much of their time will be spent on straight, often nearly empty, highways, it is proving to be much easier to automate trucks, especially those devoted to long-distance hauling. Furthermore, trucking companies have a huge incentive to bring self-driving trucks online since they will lead to a dramatic reduction in various costs associated with human drivers such as pay, insurance, and other expenses (e.g. lawsuits) associated with accidents caused by human error. Of course there will be other kinds of losses associated with the automation of trucking, such as jobs (especially long-haul truck drivers) and those now to be had in truck stops.

In the area of Artificial Intelligence (for example, Google’s AutoML), we will see the elimination, at least some extent, of highly skilled human prosumers. This will occur as a result of automating the production of new forms of AI (and algorithms) based on algorithms that learn (a form of consumption) on their own. This development is driven, in part, by a shortage of humans (as prosumers) skilled enough to do the work.

Then there are the advancements in smart (or digital) pills (e.g. anti-psychotics such as Abilify). Such pills have built-in sensors that are not only consumed by humans to, hopefully, produce the desired effect on them, but more importantly to produce information on their use to be consumed by other interested parties (relatives, doctors, etc.). The goal is to help insure that people, especially the elderly and the mentally ill, not only actually take the medications prescribed for them, but that they use them in the appropriate manner (dosage, timing, etc.). Another objective is be sure that patients (e.g. those who have just had surgery) do not abuse the use of drugs such as opiods. Also in the works, as well as in limited use, is the “exercise pill” (or “exercise-in-a-pill”). After such a pill is ingested (consumed), it produces biochemical changes with the beneficial effects (lower blood pressure, lower cholesterol, and weight loss) associated with exercise, but without the need to move a muscle.

There will continue to be dramatic advances in prosuming machines further limiting, if not eliminating, the human prosumer.

 

It’s Time to Pay Digital Prosumers for the Data They Now Provide Free of Charge

A recent New York Times article made the case that users- prosumers- provide highly valuable information to internet sites such as Google, Facebook and Amazon.com. That information is currently worth $1,000 per user, an amount that will rise rapidly in the coming years. The argument is made that these companies, as well as the data brokerages (with current revenue of $150 billion a year) that purchase and sell such data, ought to be taxed. While this a radical suggestion, at least as far as those who run these companies are concerned, it does not go nearly far enough. If we are willing to say that these companies should be taxed for this information, a far more consequential change would involve actually paying prosumers for the information they now provide, consciously and unconsciously, free of charge.

Hidden from view is the fact that the vast success and wealth of Google, Facebook, Amazon.com, and other companies of their ilk are largely based on the free labor provided by prosumers. As things now stand, prosumers are even more exploited than the workers in traditional capitalist businesses. Such workers have generally been paid as little as possible (the fast food industry is a notable example), but those prosumers who “work” on these online sites receive no pay at all. They are expected to be satisfied with rewards such as the ease of ordering products online and of maintaining contact with, and being informed about the lives of, family and friends. This just not enough!

After all, those at the top of these digital businesses are billionaires many times over largely because of this free labor. (Admittedly, these entrepreneurs deserve to be rewarded for their ideas and for the infrastructure they provide online prosumers that allows them to consume and produce). In thinking about paying prosumers, consider how much it would cost these digital businesses to hire traditional market researchers to collect and compile all of these data. In fact, given the vast and rapidly growing amount of data, it would be impossible for them to do at any price.

Digital businesses are getting an incomparable gift from their users. It is time for them to offer economic rewards to these prosumers commensurate with their contributions to the corporate bottom line.

Viewers as Prosuming Machines or as Directors of Highly Personalized Movies?

A recent (January 30, 2017) New Yorker article deals with interactive filmmaking. This revolutionary change will allow viewers to affect, consciously and unconsciously, what transpires in movies, perhaps on a moment-to-moment basis. Of course, from my point of view, such viewers (audiences) are prosumers. While viewers- and audiences- are inherently prosumers, this technological development allows for a great expansion of their role in the prosumption process. This is especially true of the productive aspect (which has always been there) of the prosumption of movies.

One of those at the forefront of this development had been influenced by the interactive “Choose Your Own Adventure” novels he had read when he was young (as well as by video games which inherently clearly involve both production and consumption). At central points in those stories, readers are allowed to make choices in the direction taken by the story and instructed to go to the page where the story moves in the chosen direction.

Early experiments in interactive movies put controllers in the audience members’ hands, but this technology offered them only limited options. Momentum started to build when Investors began to see the economic potential inherent in interactive technology, including the fact that it would allow them to collect useful and potentially profitable information on audience members.

The technology already exists allowing audience members to make conscious choices in the direction taken by a movie’s story. Envisioned is a system that tracks viewers’ story preferences and provides it to them. This would be much like the online tracking of our interests and then having ads appear that are in line with them. Even further, there soon will be eye-tracking technology leading to movies that focus on where viewers direct their attention, rather than having the focus predetermined by a director.

Such systems are, and increasingly will be, “prosuming machines”. They will consume an audience member’s preferences- either explicit or implicit in, for example, eye movement- and customize ensuing, or even ongoing, content in the movie to those preferences. In the process, as prosumption itself becomes increasingly unconscious, human prosumers will be transformed into prosuming machines more and more lacking in agency.

However, another possibility is technology that would allow viewers to move objects on the screen. In that case, viewers would have much more agency as they actively direct the movie as it unfolds. The next step, at least conceivably, would allow the audience to be able to insert entirely different objects, as well as people and events, into the story.

Whether it is unconscious or conscious, viewers in the future will be much more productive prosumers of the movies.

Demonizing the “Founder” of McDonald’s: It’s Much More the System than the Man

Although it is rooted in the 1950s and the creation of McDonald’s, the movie “The Founder” is a not-so-subtle attack on ruthless Trumpian-style and –era business practices.

The “founder” in question is Ray Kroc (who never founded anything- not the restaurant, its system, menu additions like Egg McMuffin, the idea that the real money was in the owning of the land on which the franchises were built and the rent that came from it, and so on). After many early failures as a Willy-Loman-like salesman, Kroc was drawn to the McDonald’s brothers’ revolutionary new business model in San Bernardino, California because it had placed an unusually large order for several of the milk shake machines he was hawking. The brothers were happy with their modest success and had no interest in building an empire. Kroc did and to his credit he was willing to work hard and risk all- including his home- on the future of the business which he saw in franchising (another idea and system not founded by Kroc).

But Kroc, like Trump, was ruthless and unethical both in his business and personal life eventually lying repeatedly to succeed. He ultimately screwed the McDonald brothers out of the $100 million a year he had verbally promised to them, but had refused to put in writing. In the end, one wonders whether the deceit was worth it. True, Kroc became a billionaire but he sold his soul in the process. In addition, after his death his wife gave it all away, much of it to the Salvation Army.

The movie is strong on the system that the McDonald brothers created. Its essence is depicted in a neatly choreographed scene on a tennis court with a chalk-drawn and re-drawn floor plan of the restaurant. The system they created drew heavily on Taylorism and time-and-motion studies, as well as on Henry Ford’s assembly line. Indeed, McDonald’s pioneered the assembly-line production of burgers (and other foods) and the treating of its customers as if they were on an assembly-line (especially in the later drive-throughs).

Beyond the McDonald’s “system”, the McDonald brothers created high(er) quality burgers and shakes (both eventually compromised by Kroc), finger food that did not require utensils, a self-service restaurant that kept customers moving because there were no seats, and a clean restaurant and environment that discouraged teenagers from hanging around and making a mess and lots of noise.

Kroc also quickly recognized the value of the name and of the golden arches (also created by the McDonald brothers). As depicted in the movie, he saw a similarity between those arches and church steeples and courthouse structures. In my terms, he is depicted as implicitly recognizing that he was creating a new “cathedral of consumption”.

One of the major problems with the movie is the failure to address some of the larger issues that are part of the process of “McDonaldization”. These include the broader changes that contributed greatly to McDonald’s success (the post WWII growth of automobile sales and travel, the national highway system, and the suburbs) as well as the broader changes it has wrought, especially the McDonaldization of society and of many of its institutions (schools, churches, etc.). Also missing is coverage of the many irrationalities associated with fast food chains (adverse impact on health, the environment, etc) and of McDonaldization more generally (e.g., increased homogenization), as well as even broader issues such as the globalization of the chain, its basic ideas, and its irrationalities which all played a major role in the “globalization of nothing”.

In the end, the movie focuses too much on one “demon” (Kroc), but minimizes larger demons (capitalism) and totally ignores others (the McDonaldization of society and its many irrationalities). As is true in much of the popular media and its products, The Founder individualizes and psychologizes when it needs to “sociologize”.

Amazon.Go: New Heights of McDonaldization

Not that I can take any credit for it, but Amazon has unwittingly managed to wrap up much of what I have been thinking and writing about for the last three decades in one nice little material world bundle, Amazon Go. The prototype of this updated version of a convenience store now exists in Amazon’s new office building in downtown Seattle.

It is a highly McDonaldized setting in which, as in all McDonaldized settings:

  • Its operations are very efficient (e.g. no checkout lines; just “walk-through”, “grab-and-go”, and “walk out”),
  • It is calculable, with an emphasis on speed in getting through the store and offering quickly eaten finger foods
  • It is predictable, specializing in pre-prepared meals and “chef-made meal kits”
  • It makes great use of non-human technologies: smartphone apps to gain entry; sensors to keep track of what is being taken off the shelf and is purchased; automated technologies to total the purchases and to charge them to the consumer’s account. This is made necessary by the fact that few employees are likely to be present since there will be no checkout counter- a clear threat to the 3.5 million cashiers in the United States.
  • The threat to jobs is one of the irrationalities of this rational system. It will help to further reduce the number of paying jobs (using technology similar to that used in driverless cars that is costing taxi drivers their jobs) and to add to the working class discontent that helped fuel the rise of Donald Trump, Brexit, etc..

 

From the point of view of consumption, Amazon Go is a place (a new means of consumption, or cathedral of consumption) to which people are drawn to consume. However, it is better thought of as a place (a means of prosumption) where people go to prosume, that is, produce what they consume. Consumption is traditionally a process where others, especially employees, produce in various ways what others consume. This has declined in recent years as there are ever-fewer employees to do such work. Consumers are required do an increasing amount of that work either on their own (carrying their own trays in fast food restaurants, gathering their own food in supermarkets) or with the help of new technologies (e.g. self-checkout and check-in systems). This is especially the case in online sites and stores, including Amazon.com, where the consumer does all of the work of finding, ordering and paying for a purchase. This kind of a system is more difficult to create in a bricks-and-mortar store, but Amazon’s Go, if it is successful and widely implemented, will be an important step in that direction.

Snap’s Spectacles: Another Small Advance in the Development “Prosuming Machines”

In 2015 I published an article in the Journal of Consumer Culture on prosuming machines. Snapchat’s sunglasses fitted with a camera (“Spectacles”) are such a machine. They enter a market that was sought most recently by Google Glass. Google Glass has not been a success, but Snap’s Spectacles has been a great success initially and promises to succeed where Google Glass did not. The sunglasses are equipped with a small camera that the wearer can turn on with the tap of a button near the left temple. That permits a 10-second video of whatever one is looking at. The advance here is that rather than taking out and using a smartphone and its camera, one can video the scene without the interference of such actions; one can be more of a participant rather than merely an observer of the scene.

In other terms, Snap’s spectacles are a prosuming machine. They allow one to produce a brief video while the producer is consuming an event and, further, that the producer (and others) can consume, shortly thereafter, on his/her smartphone. However, Spectacles remain a human technology since the person wearing them must act- push that button- in order for the camera to operate. As a human technology, Spectacles represent only a small refinement in prosuming machines. They are yet another “wearable” (another example is monitoring devices worn by patients leaving the hospital) that allows one to prosume. However, they do not constitute a further step in the direction of prosuming machines that are non-human technologies. That step would require spectacles that are truly smart machines that tape whatever they- or their mini-computers- see and decide is important. Such spectacles would operate on their own consuming events and producing videos of them. An even further advance would be implantable devices that do much the same thing and intrude even less, or not at all, on the unfolding scene.

There is no question that such technologies are possible and that Snap’s spectacles, or some competitor, will soon offer them. Since they are invisible to those being videoed, such technologies would pose a far greater threat to the privacy of others than current technologies such as Spectacles. Snap is conscious of this danger since the current iteration of Spectacles lights up when a video is being shot. I suppose an insertable technology could be created that not only videos, but also lights up the videographer’s nose- a la Rudolph the red-nosed reindeer- when it is operating. That would certainly make for a more colorful world, but that should not serve to obscure the dangers associated with that world.